NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, November 17, 2011

VALLADOLID, Spain, Nov 16, 2011 (IPS) – Microcredit can help a woman to have an income. It can, for better or worse, also transform gender equations in the public and private spheres.

Making microfinance more meaningful for women in terms of real empowerment occupies much of the deliberations at the Fifth Global Microcredit Summit underway in this Spanish city.

Apparently, not all microcredit institutions (MFIs) are aware of the importance of contributing to a more integral and transforming vision that impacts women’s rights and human development.

Linda Mayoux, international consultant to Hivos and Oxfam Novib’s WEMAN Programme, classifies MFIs into three kinds: those that are minimalist, those that alleviate poverty and those that also provide empowerment avenues.

The first ones works on high rotation, high interest rates and high profitability; the second focuses on the impact that microcredit can have on the reduction of family poverty by providing loans to women.

“But to talk about a woman’s empowerment it is not enough for her to have better access to income and a better life for her family,” Patricia Padilla, manager of Asociación Alternativa para el Desarrollo Integral de las Mujeres (ADIM), told IPS.

It is important to have MFIs that also look at empowerment, the third on Mayoux’s list, Padilla said. With this philosophy, ADIM carries out development business services with gender approach and management of knowledge in Nicaragua.

“To achieve the goal of ending extreme poverty in women, who represent 80 percent of those at the bottom of the pyramid, it is necessary to have educational and training interventions, but other kinds of actions are needed to empower them,” Padilla said.

“After giving the loans, our institution offers training to the borrowers to increase their entrepreneurial and personal identity, their economic and life independence, their use of tools to increase their training skills in basic accounting principles as well as marketing and autonomy,” Padilla said.

“Autonomy leads to self-recognition, and from this point each woman can move towards personal realisation,” she added.